FULL YEAR RESULTS PRESENTATION APRIL 2019
D I S C L A I M E R This document is being supplied to you solely for your information and does not any discussion, correspondence or contact concerning the information in this document with any of the directors or employees of the Company or its subsidiaries nor with any of constitute or form part of any offer or invitation or inducement to sell or issue, or any their customers or suppliers, or any governmental or regulatory body without the prior solicitation of any offer to purchase or subscribe for, any shares in the Company or any written consent of the Company. other securities, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor Certain statements, beliefs and opinions in this document and any materials distributed does it constitute a recommendation regarding the securities of the Company. No in connection with this document are forward-looking. The statements typically contain information made available to you in connection with this document may be passed on, words such as “anticipate”, “assume”, “believe”, “estimate”, “expect”, “plan”, “intend” and copied, reproduced, in whole or in part, or otherwise disseminated, directly or indirectly, words of similar substance. By their nature, forward-looking statements involve a to any other person. number of risks, uncertainties and assumptions that could mean actual results or events differ materially from those expressed or implied by the forward-looking statements. Some of the information in this document is still in draft form and is subject to These risk, uncertainties and assumptions could adversely affect the outcome and verification, finalisation and change. Neither the Company nor its affiliates nor advisers financial effects of the plans and events described herein. Statements contained in the are under an obligation to correct, update or keep current the information contained in document regarding past trends or activities should not be taken as a representation or this document or to publicly announce the result of any revision to the statements made warranty (express or implied) that such trends or activities will continue in the future. No statement in this document is intended to be a profit forecast. You should not place herein except where they would be required to do so under applicable law. reliance on forward-looking statements, which speak only as of the date of this No reliance may be placed for any purpose whatsoever on the information contained in document. this document. No representation or warranty, expressed or implied, is given by or on behalf of the Company or any of the Company’s directors, officers or employees or any The information in this document may constitute non-public price sensitive information other person as to the accuracy or completeness of the information or opinions ('inside information'). You should not base any behaviour in relation to the Company's contained in this document and no liability whatsoever is accepted by the Company or securities, financial instruments related to the Company’s securities or any other any of the Company’s members, directors, officers or employees nor any other person securities and investments on information until after it is made publicly available by the for any loss howsoever arising, directly or indirectly, from any use of such information or Company. Any dealing or encouraging others to deal on the basis of such information opinions otherwise arising in connection therewith. may amount to insider dealing under the Criminal Justice Act 1993 and/or to market abuse under the Financial Services and Markets Act 2000. This presentation and its contents are confidential. By reviewing and / or attending this presentation you are deemed to accept that you are under a duty of confidentiality in relation to the contents of this presentation. You agree that you will not at any time have 2
Steve Lucas Chairman 3
S U C C E S S F U L 2 0 1 8 , W E L L P O S I T I O N E D F O R T H E F U T U R E Ferrexpo is well placed to benefit from demand for pellet – Large resource and well invested assets – Competitive cost position – High value product 65% Fe pellets – High quality well-diversified customers Continued strong financial performance – Record price premium for our product – Net debt at a 6 year low – Further investment to grow output over medium term – Record dividend pay-out ratio of 41%: 23.1 cents per share (2017: 16.5 cents per share) 4
2018 FINANCIAL PERFORMANCE Chris Mawe, CFO 5
S T R O N G B U S I N E S S P R O F I L E Summary Financials Revenue up 6% – Average selling price increased by $9 per tonne $M (unless otherwise stated) 2018 2017 Change – Strong market environment for pellets continued (significant increase in premiums) Pellet production (kt) 10,607 10,444 2% – Lower sales volumes reflect temporary logistics constraints Sales volumes (kt) 10,227 10,467 (2)% Costs reflect expected cost increases Avg CFR 62% Fe fines price ($/t) 69.5 71.3 (3)% – Higher costs (+$11 per tonne) Avg C1 cost (US/t) 43.3 32.3 34% • Increased commodity prices, maintenance & mining activity, local inflation Revenue 1,274 1,197 6% • UAH appreciated slightly vs. US$ adding pressure Cost of sales (508) (411) 24% EBITDA Gross profit 766 786 (3)% – Gross profit down 3% Selling & distribution (260) (220) 18% – Higher freight costs reflected in revenue & selling & distribution costs General & admin & other (73) (83) (12)% – $12M swing in operating forex loss Operating foreign exchange (losses)/ gains (5) 7 Balance sheet continues to strengthen Operating profit 428 490 (13)% – Net debt reduced by $55M EBITDA 503 551 (9)% – Available liquidity $268 million (incl. undrawn PXF facility of $205 million 1 ) Profit for the year 335 394 (15)% – Net debt to EBITDA comfortably below 1x Diluted EPS (cents) 56.7 66.9 (15)% – 2019 debt amortisations covered by cash & undrawn facilities Full year dividend declared (ordinary + 23.1 16.5 +40% special) per share (cents) Dividend at record level for Group Net debt (339) (394) (14)% – Dividend reflects strong business profile & outlook – Full year dividend 23.1 cents per share (FY 2017: 16.5 cents per share) Net debt to EBITDA (x) 0.67 0.72 (7)% • Final dividend declared (ordinary + special) 13.2 cents per share (2017: 9.9 cents per share) 1 : In March 2019 Ferrexpo drew down US$185 million of its available PXF facility 6
H I G H E R P E L L E T P R E M I U M S , H I G H E R C O M M O D I T Y C O S T I N P U T S & L O C A L I N F L AT I O N EBITDA 2018 VS. 2017 (US$M) 17 19 32 141 111 5 15 551 503 2017 EBITDA Production Pellet premium Inventories Fines price C3 freight C1 cost Operating forex & 2018 EBITDA volumes other 7
C O S T S U P R E F L E C T I N G H I G H E R C O M M O D I T Y P R I C E S & S TA B L E C U R R E N C Y I N S T R O N G S T E E L M A R K E T 2018 costs reflect: C1 cash costs breakdown 2018 vs. 2017 $ per tonne – Commodity price inflation: higher diesel, gas, steel prices, coal • Avg brent in 2018 up 31% at $71/t vs. $54/t in 2017 50 0.7 0.2 45 1.9 – Local inflation 2.1 40 2.8 3.3 • PPI 18% year on year 35 • Salary increase of 13% (real) annualised 30 43.3 25 – UAH appreciated 1% against $ from 1.1.18 to 31.12.18 32.3 20 • Approximately 40% of operating costs in UAH (incl. rail tariffs) 15 10 – Higher level of repair & maintenance costs C1 cost Commodity Local Repairs & Stripping Royalties Other C1 cost 2018 2017 price inflation maintenance – Increased stripping at FPM increases Historic C1 cash cost vs. received price ($/tonne) C1 cash costs – over 60% commodity related $ per tonne 200 50% 5% 3% 40% 150 23% 9% 30% Electricity Fuel 100 Gas Grinding media 8% 20% Materials Spare parts 50 9% 10% Maintenance Personnel 9% Royalties Explosives 0 0% 10% 2011 2012 2013 2014 2015 2016 2017 2018 16% 8% C1 cash cost Received FOB price EBITDA margin 1 2012 C1 cost included ramp up costs at FYM 2 Realised FOB price is calculated as Platts 62% Fe CFR + pellet premium + Fe premium – C3 freight 8
Recommend
More recommend
